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Partial decentralisation and inter-governmental electoral competition in local public good provision

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  • Marco Catola

Abstract

Over the last few years, the literature on partial decentralisation has largely grown, pointing out that one of its effects is a reduction in accountability because voters are imperfectly informed about each government contribution. However, the possibility for politicians to directly manipulate this asymmetry in information has not been addressed yet. This paper provides a simple model in which two levels of government are involved in the provision of a local public good with the local government that can decide to spend its budget either on the provision of the public good or in spending that influences the information of the voters in its favour. A central result is that the conflict of interest that arises among the levels of government reduces the spending in the public good at both levels, while it generates a wasteful spending to pander to voters.

Suggested Citation

  • Marco Catola, 2019. "Partial decentralisation and inter-governmental electoral competition in local public good provision," Discussion Papers 2019/243, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2019/243
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2019-243.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    partial decenstralisation; party alignment; accountability; intergovernmental transfers;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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